CLU economists expect local income disparity to grow

A line of job applicants snakes through a rope-line to attend the CUNY Big Apple Job Fair, in New York. In the previous survey in July, the economists predicted unemployment of 8.7 percent at the end of next year. In the survey before that, they foresaw 8.4 percent. Some now think unemployment won’t drop to a historically normal 5.5 percent to 6 percent until at least 2018.

AP file photo

Income disparities will worsen in Ventura County next year, according to California Lutheran University's Center for Economic Research and Forecasting, which releases its 2013 forecast today.

"What we are sure of is that inequality will increase and those at the lower portions of the income distribution will have a terribly difficult time obtaining a standard of living that most of the people reading this would consider minimal," writes the center's director, Bill Watkins.

The problem locally, as Watkins sees it, is that the middle class is disappearing and what's left are "old, rich people" who will employ landscapers and health care workers. The region's college-educated young people will be hard-pressed to find local work and will be forced to live with their parents if they want to stick around.

"Two populations, one wealthy and one poor, living side by side with limited upward mobility for the poorer population is a prescription for problems," Watkins writes in the forecast. "It's worse when the differences become racial. Opportunity along with quality education for everyone solves all of those problems."

CLU's forecast is the first local economic forecast for 2013 to be released. The Santa Barbara-based California Economic Forecast will release its projections in February.

Overall, the CLU forecast has become more pessimistic since March, and the global economy is partially to blame, said CLU economist Dan Hamilton.

"Factors for a global recovery remain elusive," he said.

Also, real estate does not appear ready for recovery.

"Improvements continue but it's not a normal market still," Hamilton said. "There are still too many homes out there where the ownership status will have to change."

CLU economists predict job gains next year that will be in line with gains made at the state level. Ventura County's unemployment rate is 8.8 percent. It has averaged 9.2 percent since the start of the year. California's jobless rate is 10.2 percent.

He points to the slight population increases seen in recent years as evidence of a changing labor market. In 2011 Ventura County's population grew at a rate of 0.59 percent, according to the state Department of Finance, which estimated the county's population to be 830,215. The state releases 2012 population figures next month.

Watkins attributes the slow population growth to declining migration and sees that as a sign of economic decline.

In the short term, CLU's forecasters expect soft retail sales next year and personal income growth to be weak, at best.

In the long term, they paint Ventura County as a place that's becoming a less appealing place to live for all but a select few "high-net-worth people."

"Those who value opportunity and economic vigor more than beaches, climate, and open space will leave if they have the resources," Watkins predicts. "I think the county will be losing something important."

Watkins will present the report at 11:30 a.m. today at the Serra Center in Camarillo.